This TrialNet clinical center application is divided into three sections. Section I discusses the strength of our center to both complete DPT-1 and to conduct additional studies in Type 1 diabetes. The NW Clinical Center has consistently been a top performing site for DPT-1. From 1994 through Nov. 2000, NW Clinical Center has screened about 8600 subjects, or just over 100 subjects/month. Three of the top four states with the highest number screened per population are under the auspices of our clinical center. The NW Clinical Center is second with enrollment in high-risk trial, third for overall enrollment, and second for enrolled subjects/screened subjects. In addition, our center has been the leader among DPT-1 centers in overall compliance with the protocol. Section II discusses the current issues important to intervention in the Type 1 diabetes disease process. Areas discussed include pending issues for DPT-1, as well as issues related to selection of population, intervention, and outcome measures for TrialNet protocols. Section III details a proposed clinical trial. Our hypothesis is that etanercept (Enbrel) alone or in conjunction with methotrexate will improve preservation of beta cell function in newly diagnosed Type 1 patients over a two year period. In this trial, we will address the following three specific aims: (1) demonstrate the short-term safety of etanercept alone or in conjunction with methotrexate in newly diagnosed patients, (2) select which intervention better preserves beta cell function in newly diagnosed patients, (3) test whether immune measures can serve as surrogate markers for effect of therapy in newly diagnosed patients. This is a three arm, open-label Phase II, randomized trial of etanercept (Enbrel) or etanercept and methotrexate (MTX) in patients with newly diagnosed Type 1 diabetes. Following screening and baseline evaluations, eligible patients will be enrolled in the study and randomly assigned to one of three treatment groups. The sample size is a total of 162 patients with 54 in each of three groups. The primary outcome measure is peak C-peptide response after mixed meal stimulation. Secondary outcomes include C-peptide response to arginine stimulation, insulin dose, hypoglycemic events, and glycemic excursions. In addition, we will use new technologies for assessing T-cell activity to both understand the natural history and determine if these immune measures can serve as surrogate markers for effect of therapy.